37
The Current State of Shopper Marketing in Asia 11/29/2013 1

The Current State of Shopper Marketing in · PDF file5 Many businesses in Asia plan to invest significantly in shopper marketing and believe this will increase: some 50% intend to

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The Current State of

Shopper Marketing in Asia

11292013 1

Table of Contents

Executive Summary 3

The increasing importance of shopper marketing in Asia 7

Investing in shopper marketing 11

Organizing for shopper marketing 16

Understanding shoppers and leveraging insights 20

The talent shortage 25

Key conclusions 28

2

Section 1

Executive Summary

Executive Summary

4

A b o u t t h e S t u d y

Nielsen and engage partnered to conduct a study of consumer goods companies

operating in Asia early in 2013 This quantitative online survey was carried out

among 63 managers - 89 of which held a senior position within the organization

within the industry whose roles were relevant to shopper marketing The sample

focused only on consumer goods manufacturers

The survey gathered responses in various areas of shopper marketing its definition

team structure development of business process development of shopper

understanding level of shopper marketing investment and importance talent

competency as well as the challenges of shopper marketing implementation and

measurement of its success

Definition

The following definition of shopper marketing has been used during the survey and

in the development of the whitepaper

ldquoThe systematic creation and application of elements of the marketing mix to

affect positive change in shopper behavior in order to drive consumption of a

brandrdquo1

Summary of key findings

Shopper marketing is becoming increasingly important for consumer goods

companies in Asia 82 of companies report that shopper marketing will become

more important in the future This tends to be led by large packaged foods and

beverages companies (with turnovers in excess of US$100 million) For most

companies shopper marketing has become a priority in the last 5 years

1 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 36

5

Many businesses in Asia plan to invest significantly in shopper marketing and

believe this will increase some 50 intend to invest more money in the future and

36 say that shopper marketing already accounts for more than 10 of total

marketing spend 64 of respondents say that there is an annual budget set aside

for shopper marketing activities

32 of respondents believe shopper marketing delivers higher returns than

traditional trade expenditure - although 50 admit to not measuring ROI at all 75

of respondents feel that the success of shopper marketing investments should be

measured in sales lift and brand share

Many Asian businesses are re-organizing for shopper marketing 57 of the

companies surveyed have developed dedicated shopper marketing teams

Unsurprisingly shopper marketing teams are most prevalent in large businesses -

60 of companies surveyed had turnovers of more than US$1 billion and 67 of

companies had turnovers between 100 million and 1 billion dollars As of yet

however there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of cases) it reports to trade

marketing Whilst shopper marketing teams tend to be small ndash 68 of teams are

composed of less the 10 people - half of the companies surveyed expect shopper

marketing headcount to increase

Shopper research is becoming more the norm with 68 of companies having

conducted at least one shopper study in the last 12 months 18 reported that they

had conducted more than 6 shopper research programs in the last year However

most organizations have no formal processes to support shopper marketing 79 of

companies do not currently have consistent shopper marketing business processes

in place Even amongst those companies with dedicated shopper marketing teams

75 of the companies do not have consistent business processes in place at a

market or regional level It appears that perhaps business process comes later in a

shopper marketing teamrsquos evolution - those business that do have business

processes in place report that shopper marketing has been a business priority for

more than 3 years

The Current State of Shopper Marketing in Asia

6

Beyond the lack of business process it appears that talent shortages are the biggest

hindrance to the successful adoption of shopper marketing in Asia Only 4 of

respondents scored their companyrsquos shopper marketing competence as ldquoadvancedrdquo

96 scored as ldquodevelopingrdquo or lower Talent shortages (68) and lack of training

(50) are cited as the key reasons behind this

Key conclusions

Increasingly companies see shopper marketing as an essential component of their

marketing strategy Investment in shopper research and shopper marketing

activities will increase as larger businesses see this as a potential competitive

advantage and smaller companies follow suit However these investments will not

deliver ROI without processes that integrate shopper marketing into the business at

large The shortage of talent will make competition for people fierce though this

will not necessarily lead to better results without better training and clearer ways of

working

Recommendations

Businesses should adopt a Total Marketing approach that incorporates shopper

marketing into current commercial practices This should leverage shopper insight

within a clear step by step process to developing strategies and investment plans

Businesses should seek to fast-track shopper marketing by developing people with

existing marketing competencies into total marketers of the future

Executive Summary

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Table of Contents

Executive Summary 3

The increasing importance of shopper marketing in Asia 7

Investing in shopper marketing 11

Organizing for shopper marketing 16

Understanding shoppers and leveraging insights 20

The talent shortage 25

Key conclusions 28

2

Section 1

Executive Summary

Executive Summary

4

A b o u t t h e S t u d y

Nielsen and engage partnered to conduct a study of consumer goods companies

operating in Asia early in 2013 This quantitative online survey was carried out

among 63 managers - 89 of which held a senior position within the organization

within the industry whose roles were relevant to shopper marketing The sample

focused only on consumer goods manufacturers

The survey gathered responses in various areas of shopper marketing its definition

team structure development of business process development of shopper

understanding level of shopper marketing investment and importance talent

competency as well as the challenges of shopper marketing implementation and

measurement of its success

Definition

The following definition of shopper marketing has been used during the survey and

in the development of the whitepaper

ldquoThe systematic creation and application of elements of the marketing mix to

affect positive change in shopper behavior in order to drive consumption of a

brandrdquo1

Summary of key findings

Shopper marketing is becoming increasingly important for consumer goods

companies in Asia 82 of companies report that shopper marketing will become

more important in the future This tends to be led by large packaged foods and

beverages companies (with turnovers in excess of US$100 million) For most

companies shopper marketing has become a priority in the last 5 years

1 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 36

5

Many businesses in Asia plan to invest significantly in shopper marketing and

believe this will increase some 50 intend to invest more money in the future and

36 say that shopper marketing already accounts for more than 10 of total

marketing spend 64 of respondents say that there is an annual budget set aside

for shopper marketing activities

32 of respondents believe shopper marketing delivers higher returns than

traditional trade expenditure - although 50 admit to not measuring ROI at all 75

of respondents feel that the success of shopper marketing investments should be

measured in sales lift and brand share

Many Asian businesses are re-organizing for shopper marketing 57 of the

companies surveyed have developed dedicated shopper marketing teams

Unsurprisingly shopper marketing teams are most prevalent in large businesses -

60 of companies surveyed had turnovers of more than US$1 billion and 67 of

companies had turnovers between 100 million and 1 billion dollars As of yet

however there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of cases) it reports to trade

marketing Whilst shopper marketing teams tend to be small ndash 68 of teams are

composed of less the 10 people - half of the companies surveyed expect shopper

marketing headcount to increase

Shopper research is becoming more the norm with 68 of companies having

conducted at least one shopper study in the last 12 months 18 reported that they

had conducted more than 6 shopper research programs in the last year However

most organizations have no formal processes to support shopper marketing 79 of

companies do not currently have consistent shopper marketing business processes

in place Even amongst those companies with dedicated shopper marketing teams

75 of the companies do not have consistent business processes in place at a

market or regional level It appears that perhaps business process comes later in a

shopper marketing teamrsquos evolution - those business that do have business

processes in place report that shopper marketing has been a business priority for

more than 3 years

The Current State of Shopper Marketing in Asia

6

Beyond the lack of business process it appears that talent shortages are the biggest

hindrance to the successful adoption of shopper marketing in Asia Only 4 of

respondents scored their companyrsquos shopper marketing competence as ldquoadvancedrdquo

96 scored as ldquodevelopingrdquo or lower Talent shortages (68) and lack of training

(50) are cited as the key reasons behind this

Key conclusions

Increasingly companies see shopper marketing as an essential component of their

marketing strategy Investment in shopper research and shopper marketing

activities will increase as larger businesses see this as a potential competitive

advantage and smaller companies follow suit However these investments will not

deliver ROI without processes that integrate shopper marketing into the business at

large The shortage of talent will make competition for people fierce though this

will not necessarily lead to better results without better training and clearer ways of

working

Recommendations

Businesses should adopt a Total Marketing approach that incorporates shopper

marketing into current commercial practices This should leverage shopper insight

within a clear step by step process to developing strategies and investment plans

Businesses should seek to fast-track shopper marketing by developing people with

existing marketing competencies into total marketers of the future

Executive Summary

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 1

Executive Summary

Executive Summary

4

A b o u t t h e S t u d y

Nielsen and engage partnered to conduct a study of consumer goods companies

operating in Asia early in 2013 This quantitative online survey was carried out

among 63 managers - 89 of which held a senior position within the organization

within the industry whose roles were relevant to shopper marketing The sample

focused only on consumer goods manufacturers

The survey gathered responses in various areas of shopper marketing its definition

team structure development of business process development of shopper

understanding level of shopper marketing investment and importance talent

competency as well as the challenges of shopper marketing implementation and

measurement of its success

Definition

The following definition of shopper marketing has been used during the survey and

in the development of the whitepaper

ldquoThe systematic creation and application of elements of the marketing mix to

affect positive change in shopper behavior in order to drive consumption of a

brandrdquo1

Summary of key findings

Shopper marketing is becoming increasingly important for consumer goods

companies in Asia 82 of companies report that shopper marketing will become

more important in the future This tends to be led by large packaged foods and

beverages companies (with turnovers in excess of US$100 million) For most

companies shopper marketing has become a priority in the last 5 years

1 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 36

5

Many businesses in Asia plan to invest significantly in shopper marketing and

believe this will increase some 50 intend to invest more money in the future and

36 say that shopper marketing already accounts for more than 10 of total

marketing spend 64 of respondents say that there is an annual budget set aside

for shopper marketing activities

32 of respondents believe shopper marketing delivers higher returns than

traditional trade expenditure - although 50 admit to not measuring ROI at all 75

of respondents feel that the success of shopper marketing investments should be

measured in sales lift and brand share

Many Asian businesses are re-organizing for shopper marketing 57 of the

companies surveyed have developed dedicated shopper marketing teams

Unsurprisingly shopper marketing teams are most prevalent in large businesses -

60 of companies surveyed had turnovers of more than US$1 billion and 67 of

companies had turnovers between 100 million and 1 billion dollars As of yet

however there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of cases) it reports to trade

marketing Whilst shopper marketing teams tend to be small ndash 68 of teams are

composed of less the 10 people - half of the companies surveyed expect shopper

marketing headcount to increase

Shopper research is becoming more the norm with 68 of companies having

conducted at least one shopper study in the last 12 months 18 reported that they

had conducted more than 6 shopper research programs in the last year However

most organizations have no formal processes to support shopper marketing 79 of

companies do not currently have consistent shopper marketing business processes

in place Even amongst those companies with dedicated shopper marketing teams

75 of the companies do not have consistent business processes in place at a

market or regional level It appears that perhaps business process comes later in a

shopper marketing teamrsquos evolution - those business that do have business

processes in place report that shopper marketing has been a business priority for

more than 3 years

The Current State of Shopper Marketing in Asia

6

Beyond the lack of business process it appears that talent shortages are the biggest

hindrance to the successful adoption of shopper marketing in Asia Only 4 of

respondents scored their companyrsquos shopper marketing competence as ldquoadvancedrdquo

96 scored as ldquodevelopingrdquo or lower Talent shortages (68) and lack of training

(50) are cited as the key reasons behind this

Key conclusions

Increasingly companies see shopper marketing as an essential component of their

marketing strategy Investment in shopper research and shopper marketing

activities will increase as larger businesses see this as a potential competitive

advantage and smaller companies follow suit However these investments will not

deliver ROI without processes that integrate shopper marketing into the business at

large The shortage of talent will make competition for people fierce though this

will not necessarily lead to better results without better training and clearer ways of

working

Recommendations

Businesses should adopt a Total Marketing approach that incorporates shopper

marketing into current commercial practices This should leverage shopper insight

within a clear step by step process to developing strategies and investment plans

Businesses should seek to fast-track shopper marketing by developing people with

existing marketing competencies into total marketers of the future

Executive Summary

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Executive Summary

4

A b o u t t h e S t u d y

Nielsen and engage partnered to conduct a study of consumer goods companies

operating in Asia early in 2013 This quantitative online survey was carried out

among 63 managers - 89 of which held a senior position within the organization

within the industry whose roles were relevant to shopper marketing The sample

focused only on consumer goods manufacturers

The survey gathered responses in various areas of shopper marketing its definition

team structure development of business process development of shopper

understanding level of shopper marketing investment and importance talent

competency as well as the challenges of shopper marketing implementation and

measurement of its success

Definition

The following definition of shopper marketing has been used during the survey and

in the development of the whitepaper

ldquoThe systematic creation and application of elements of the marketing mix to

affect positive change in shopper behavior in order to drive consumption of a

brandrdquo1

Summary of key findings

Shopper marketing is becoming increasingly important for consumer goods

companies in Asia 82 of companies report that shopper marketing will become

more important in the future This tends to be led by large packaged foods and

beverages companies (with turnovers in excess of US$100 million) For most

companies shopper marketing has become a priority in the last 5 years

1 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 36

5

Many businesses in Asia plan to invest significantly in shopper marketing and

believe this will increase some 50 intend to invest more money in the future and

36 say that shopper marketing already accounts for more than 10 of total

marketing spend 64 of respondents say that there is an annual budget set aside

for shopper marketing activities

32 of respondents believe shopper marketing delivers higher returns than

traditional trade expenditure - although 50 admit to not measuring ROI at all 75

of respondents feel that the success of shopper marketing investments should be

measured in sales lift and brand share

Many Asian businesses are re-organizing for shopper marketing 57 of the

companies surveyed have developed dedicated shopper marketing teams

Unsurprisingly shopper marketing teams are most prevalent in large businesses -

60 of companies surveyed had turnovers of more than US$1 billion and 67 of

companies had turnovers between 100 million and 1 billion dollars As of yet

however there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of cases) it reports to trade

marketing Whilst shopper marketing teams tend to be small ndash 68 of teams are

composed of less the 10 people - half of the companies surveyed expect shopper

marketing headcount to increase

Shopper research is becoming more the norm with 68 of companies having

conducted at least one shopper study in the last 12 months 18 reported that they

had conducted more than 6 shopper research programs in the last year However

most organizations have no formal processes to support shopper marketing 79 of

companies do not currently have consistent shopper marketing business processes

in place Even amongst those companies with dedicated shopper marketing teams

75 of the companies do not have consistent business processes in place at a

market or regional level It appears that perhaps business process comes later in a

shopper marketing teamrsquos evolution - those business that do have business

processes in place report that shopper marketing has been a business priority for

more than 3 years

The Current State of Shopper Marketing in Asia

6

Beyond the lack of business process it appears that talent shortages are the biggest

hindrance to the successful adoption of shopper marketing in Asia Only 4 of

respondents scored their companyrsquos shopper marketing competence as ldquoadvancedrdquo

96 scored as ldquodevelopingrdquo or lower Talent shortages (68) and lack of training

(50) are cited as the key reasons behind this

Key conclusions

Increasingly companies see shopper marketing as an essential component of their

marketing strategy Investment in shopper research and shopper marketing

activities will increase as larger businesses see this as a potential competitive

advantage and smaller companies follow suit However these investments will not

deliver ROI without processes that integrate shopper marketing into the business at

large The shortage of talent will make competition for people fierce though this

will not necessarily lead to better results without better training and clearer ways of

working

Recommendations

Businesses should adopt a Total Marketing approach that incorporates shopper

marketing into current commercial practices This should leverage shopper insight

within a clear step by step process to developing strategies and investment plans

Businesses should seek to fast-track shopper marketing by developing people with

existing marketing competencies into total marketers of the future

Executive Summary

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

5

Many businesses in Asia plan to invest significantly in shopper marketing and

believe this will increase some 50 intend to invest more money in the future and

36 say that shopper marketing already accounts for more than 10 of total

marketing spend 64 of respondents say that there is an annual budget set aside

for shopper marketing activities

32 of respondents believe shopper marketing delivers higher returns than

traditional trade expenditure - although 50 admit to not measuring ROI at all 75

of respondents feel that the success of shopper marketing investments should be

measured in sales lift and brand share

Many Asian businesses are re-organizing for shopper marketing 57 of the

companies surveyed have developed dedicated shopper marketing teams

Unsurprisingly shopper marketing teams are most prevalent in large businesses -

60 of companies surveyed had turnovers of more than US$1 billion and 67 of

companies had turnovers between 100 million and 1 billion dollars As of yet

however there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of cases) it reports to trade

marketing Whilst shopper marketing teams tend to be small ndash 68 of teams are

composed of less the 10 people - half of the companies surveyed expect shopper

marketing headcount to increase

Shopper research is becoming more the norm with 68 of companies having

conducted at least one shopper study in the last 12 months 18 reported that they

had conducted more than 6 shopper research programs in the last year However

most organizations have no formal processes to support shopper marketing 79 of

companies do not currently have consistent shopper marketing business processes

in place Even amongst those companies with dedicated shopper marketing teams

75 of the companies do not have consistent business processes in place at a

market or regional level It appears that perhaps business process comes later in a

shopper marketing teamrsquos evolution - those business that do have business

processes in place report that shopper marketing has been a business priority for

more than 3 years

The Current State of Shopper Marketing in Asia

6

Beyond the lack of business process it appears that talent shortages are the biggest

hindrance to the successful adoption of shopper marketing in Asia Only 4 of

respondents scored their companyrsquos shopper marketing competence as ldquoadvancedrdquo

96 scored as ldquodevelopingrdquo or lower Talent shortages (68) and lack of training

(50) are cited as the key reasons behind this

Key conclusions

Increasingly companies see shopper marketing as an essential component of their

marketing strategy Investment in shopper research and shopper marketing

activities will increase as larger businesses see this as a potential competitive

advantage and smaller companies follow suit However these investments will not

deliver ROI without processes that integrate shopper marketing into the business at

large The shortage of talent will make competition for people fierce though this

will not necessarily lead to better results without better training and clearer ways of

working

Recommendations

Businesses should adopt a Total Marketing approach that incorporates shopper

marketing into current commercial practices This should leverage shopper insight

within a clear step by step process to developing strategies and investment plans

Businesses should seek to fast-track shopper marketing by developing people with

existing marketing competencies into total marketers of the future

Executive Summary

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

6

Beyond the lack of business process it appears that talent shortages are the biggest

hindrance to the successful adoption of shopper marketing in Asia Only 4 of

respondents scored their companyrsquos shopper marketing competence as ldquoadvancedrdquo

96 scored as ldquodevelopingrdquo or lower Talent shortages (68) and lack of training

(50) are cited as the key reasons behind this

Key conclusions

Increasingly companies see shopper marketing as an essential component of their

marketing strategy Investment in shopper research and shopper marketing

activities will increase as larger businesses see this as a potential competitive

advantage and smaller companies follow suit However these investments will not

deliver ROI without processes that integrate shopper marketing into the business at

large The shortage of talent will make competition for people fierce though this

will not necessarily lead to better results without better training and clearer ways of

working

Recommendations

Businesses should adopt a Total Marketing approach that incorporates shopper

marketing into current commercial practices This should leverage shopper insight

within a clear step by step process to developing strategies and investment plans

Businesses should seek to fast-track shopper marketing by developing people with

existing marketing competencies into total marketers of the future

Executive Summary

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 2

The increasing importance of

shopper marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

The increasing importance of shopper marketing in Asia

Shopper Marketing has been growing in importance in Europe and the US for some

time2 but here in Asia many companies have been slow to adopt shopper

marketing practices But our survey suggests that this is changing with over 60 of

the worldrsquos population and arguably much of its growth potential Asia is rapidly

being recognized as critical to the success of consumer goods companies and

shopper marketing appears to be an important driver of that success

82 of the managers surveyed predict that shopper marketing will become more

important for the companies they work for in Asia No one felt that the discipline

would become less important 12 of managers surveyed believe that shopper

marketingrsquos importance to their companies would remain unchanged

Exhibit one 82 of companies report that shopper marketing will become more important

The survey suggests that many consumer goods organizations are rapidly

embracing shopper marketing 57 of managers we surveyed told us that their

companies had begun making shopper marketing a priority in the last 5 years and

just over a third (36) of these reported prioritizing shopper marketing in the last 2

years

2 The Hub Magazine ldquoShopper Crossroadsrdquo accessed October 1 2013

httphubmagazinecomhtml2013hub_52jan_feb237230113hoyt_innovationindexhtml

8

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

9

Exhibit two For most companies shopper marketing has become a priority in the last 5 years

This suggests that the up-take of shopper marketing in Asia is some way behind that

of other regions The 2011 reports by the Grocery Manufacturers Association of

America (GMA) and Booz (a consultancy) stated ldquo95 percent of grocery

manufacturers with more than US$5 billion in annual revenues have been practicing

the discipline for longer than two years3

3 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

10

Exhibit three Companies that report that shopper marketing will become more important tend to be

led by large companies (with turnovers in excess of US$100 million)

The increasing importance of shopper marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 3

Investing in shopper marketing

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

The trend amongst manufacturers and retailers to invest more in shopper

marketing has been noted in the United States for some years As early as 2007 the

GMA reported ldquoBoth retailers and manufacturers plan to increase investments in

in-store marketing programs over the next three years More than 60 percent of

retailers and manufacturers plan to increase spendinghellip and 20 percent say that

they plan to increase it by more than five percentrdquo4

One major finding is that exactly half of the companies who responded to the

survey expect to invest more in shopper marketing in the coming years When one

considers that 43 expect expenditure to remain the same in the same period it is

likely that investments by manufacturers are likely to increase on whole

Exhibit four 50 intend to invest more money in shopper marketing activities in the future

Itrsquos clear that for the vast majority of companies shopper marketing is already an

important part of total marketing expenditure Nearly two thirds of companies in

the survey set a budget for shopper marketing as part of their annual budgeting

process and only 11 of companies do not set shopper marketing budgets

4 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013httpwwwdeloittecomassetsDcomUnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report

_200810pdf

12

Investing in shopper marketing

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

13

Exhibit five 64 of respondents say that there is an annual budget set aside for shopper marketing

activities

The survey shows that shopper marketing expenditure as a proportion of total

marketing expenditure remains relatively small for many businesses However 36

of the managers who responded to the survey indicated that shopper marketing

accounted for more than 10 of total marketing spend in 2012 and half suggested

that shopper marketing expenditure exceeded 15 of total marketing expenditure

Exhibit six 36 say that shopper marketing now accounts for more than 10 of total marketing spend

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

14

Whilst the survey itself did not seek to understand the growth in expenditure we

believe that it is likely to be growing rapidly In the United States where shopper

marketing began to emerge as a significant element of business strategy as early as

2005 very rapid growth rates were observed A 2007 GMA report stated ldquoWhile

overall marketing budgets are growing at 2 percent CAGR shopper marketing

budgets are growing at 21 percent and 26 percent CAGR for manufacturers and

retailers respectivelyrdquo 5

32 of respondents believe shopper marketing delivers higher returns that

traditional trade expenditure but 50 admit to not measuring ROI at all

Exhibit seven 32 of respondents believe shopper marketing delivers higher returns than traditional

trade expenditure but 50 admit to not measuring ROI at all

When asked ldquoHow do you measure the success of your Shopper Marketing effortsrdquo

75 of respondents answered that sales lift and brand share were used Those who

use ROI as a measure of success were in the minority with 36 measuring ROI in

the short-term and 32 in the long-term

5 GMA Deloitte Shopper Marketing Capturing a Shopperrsquos Mind Heart and Wallet accessed October 1 2013

httpwwwdeloittecomassetsDcom-SloveniaLocal20AssetsDocumentsShopper_Marketing_survey2007(6)pdf

Investing in shopper marketing

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

15

Exhibit eight 75 of respondents feel that the success of shopper marketing investments should be

measured in sales life and brand share

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 4

Organizing for shopper marketing

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

17

The survey suggests that companies in Asia are building dedicated shopper

marketing teams 57 of the companies surveyed said this was the case

Exhibit nine 57 of companies surveyed have developed dedicated shopper marketing teams

In the main shopper marketing teams tend to be small 68 of teams are

composed of less than 10 people However when asked to predict whether shopper

marketing headcount would change in the next three years half of the companies

surveyed expect shopper marketing headcount to increase while only 7 of

respondents felt it would decline

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Organizing for shopper marketing

18

Exhibit ten Shopper marketing teams are most prevalent in large businesses

As of yet there is no clear consensus as to where accountability for shopper

marketing lies though most commonly (in 32 of respondents cases) it reports to

trade marketing A further 18 of companies have shopper marketing teams within

the sales function It should be noted that in many companies trade marketing is a

sub-function of sales and therefore accountability for marketing to shoppers is

rarely given to the marketing function in consumer goods companies in Asia This is

consistent with recent research in the US where in 2011 the GMA reported ldquoBy and

large shopper marketing units operate under the auspices of the sales function but

a significant number of manufacturers have embedded shopper marketing in their

marketing organizations or created a stand-alone shopper marketing functionrdquo6

6 GMA and Booz amp Company Shopper Marketing 50 Creating Value with Shopper Solutions accessed October 1 2013

httpwwwboozcommediauploadsBoozCo-Shopper-Marketing-50pdf

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

19

Exhibit eleven There is no clear consensus as to where accountability for shopper marketing lies

though most commonly it reports to trade marketing

The reasons for placing accountability for shopper marketing in sales were not

explored in the survey Anecdotally however there is a common belief that activities

which relate to retail should be dealt with by the sales team as they have the closest

relationships with retailers This is true in other markets an earlier survey in the US

by the GMA found ldquoThat manufacturers that define shopper marketing as account

specific marketing tend to include their shopper marketing function within sales (45

percent of survey respondents) The other 30 percent include shopper marketing

within marketingbrand management and 15 percent within market research

analytics and insightsrdquo5 Drawing on this it seems that companies in Asia tend to

support the concept that shopper marketing might be a function of marketing less

than their American counterparts do

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 5

Understanding shoppers and

leveraging insights

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

21

As mentioned earlier the process of shopper marketing is focused on ldquothe creation

and application of elements of the marketing mix to affect positive change in

shopper behavior in order to drive consumption of a brandrdquo It is recognized that

effective shopper marketing must require an empirical understanding of shoppers

and their behavior

Exhibit twelve 68 of companies have conducted at least one shopper study in the last 12 months

18 reported that they had conducted more than 6 programs in the last year

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

22

The survey showed shopper research is rapidly becoming a norm amongst firms in

Asia 68 of those surveyed said they had done at least one program of shopper

research in 2012 with 18 saying that they had done more than one This is a

marked improvement over the course of the last decade an ad hoc survey carried

out by engage in 2005 found that less than 10 of companies were researching

shopper behavior However a large minority of companies have not conducted any

research programs

Of course the fact that research is being conducted does not automatically mean

that it is being used effectively We found that a startling 79 of companies had no

formal business processes in place that would support shopper marketing

Exhibit thirteen 79 of companies do not currently have consistent shopper marketing business

processes in place

Even where dedicated shopper teams have been put in place we found that 75 of

these teams had no formal process to refer to

Understanding shoppers and leveraging insights

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Exhibit fourteen 75 of the companies with dedicated SM teams have not got consistent business

processes in place at a market or region level

Whilst business processes donrsquot guarantee quality outcomes they certainly create

objective checks and balances that prevent individuals from making costly mistakes

Other studies by engage and our partners suggest that nearly 70 of in-store

investments lose money It is believed that annually consumer goods companies

spend 10 of sales on in-store activity and on average these companiesrsquo net

earnings are 75 of sales7 Potentially therefore companies lose nearly as much

money in poor in-store investments as they make in profits With so much money

now at stake we are concerned that many Asian shopper marketers may be making

decisions in a relative vacuum

For those organizations that are actively engaged in adopting shopper marketing

developing appropriate processes to support programs should be seen as a priority

Those organizations that do have processes in place tend to have adopted shopper

marketing as a priority more than 3 years ago

7 Toby Desforges and Mike Anthony The Shopper Marketing Revolution (Illinois RTC Publishing 2013) 16

23

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

24

We infer therefore that the lag between making the decision to invest in programs

and the point at which these decisions are supported by a process that would

optimize their output could be significant Acting quickly to bridge the process gap

could save money in the short-term

Exhibit fifteen Those businesses that do have business processes in place report that shopper

marketing has been a business priority for more than 3 years

Understanding shoppers and leveraging insights

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 6

The talent shortage

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

The talent shortage

26

The development of shopper marketing globally has been hampered by the lack of

availability of well-trained individuals in the field As early as 2008 the GMA

reported ldquoA real struggle for manufacturers and retailers is building the talent base

for shopper marketing In fact our survey respondents agree this is one of the most

significant gaps in their organizationsrdquo8

It seems that organizations adopting shopper marketing in Asia are experiencing

identical issues Respondents in the survey were asked to rate the competence of

managers who are accountable for shopper marketing activities on a five-level scale

(described as none ndash basic ndash developing - advanced ndash expert) No one suggested that

competence had reached the level of expert and 96 of the sample assessed their

shopper marketing teamsrsquo competence as lsquodevelopingrsquo Only 4 of those surveyed

thought that the company had lsquoadvancedrsquo competence in the field of shopper

marketing

Exhibit sixteen Competence in shopper marketing is low ndash 96 of the sample assess their shopper

marketing teamsrsquo competence as lsquodevelopingrsquo or below 14

8 GMA Deloitte Delivering the Promise of Shopper Marketing Mastering Execution for Competitive Advantage accessed October 1

2013 httpwwwdeloittecomassetsDcom

UnitedStatesLocal20AssetsDocumentsus_cb_cpg_DeloitteGMA_Shopper_Mkt_Report_200810pdf

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

The major challenges to organizations developing stronger competence in the

future appear to be the perception that there is insufficient talent available in the

market place an absence of training programs in shopper marketing and an

inability to retain team members

Exhibit seventeen The key challenges to developing competence appear to be a lack of available talent

and training

Whilst some of the causes of this are perhaps the same as in other business

functions (remuneration quality of management) shopper marketing has some

unique challenges Anecdotal evidence suggests that to many it is seen as lsquonot

proper marketingrsquo - a second tier discipline to the apparent gloss of consumer

marketing The fact that many companies choose to have their shopper marketing

teams reporting into sales (either directly or via trade marketing) will only add to

this impression A lack of clear structures ways of working and purpose may also

contribute to this Organizations that wish to get the best returns out of shopper

marketing and that see it as a priority may wish to consider how best to promote

this importance internally and consider how best to structure the organization to

reflect this important new priority

27

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Section 7

Key conclusions

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

29

S h o p p e r m a r k e t i n g w i l l b e c o m e m o r e

i m p o r t a n t

The survey shows that consumer goods companies are rapidly adopting shopper

marketing We believe that the pace of this adoption will continue and that in a

relatively short period of time shopper marketing will become a core discipline of

marketing in the Asian consumer goods industry

We believe there may be a number of contributing factors that will lead to this

1 Slowing growth in Asia

Asia has been a consistent powerhouse for corporate growth over the last decade

especially in comparison to developed markets Asiarsquos markets were less exposed to

the global slowdown and many delivered solid GDP growth But as growth rates

begin to slow particularly in India and China but also across ASEAN growth rates in

domestic consumption are also softening This increases the pressure on

manufacturers to find new growth horizons that traditional approaches may not be

able to access Shopper marketing enables marketers to identify and realize growth

opportunities efficiently

2 The search for competitive advantage

Asia has long proved to be a cut-throat environment in which to compete Asia has

been a prime focus of new market entry for global players These players now find

themselves competing head-on with increasingly sophisticated local companies

Larger players are now pressed to employ greater levels of sophistication than ever

before to maintain competitive market positions and local companies are striving

to emulate the success of international brands Shopper marketing is one approach

which potentially enables companies to secure competitive advantage

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

Key conclusions

30

3 The changing face of consumer communication

Asia has the worldrsquos largest and fastest growing internet-connected population with

many new users leapfrogging wired internet altogether and moving straight to

smartphones This creates highly connected consumers who seem to be passionate

users of social media Bangkok and Jakarta are two of the worldrsquos largest Facebook

cities9 and China-based social networks (such as Sina-Weibo and We-chat) seem to

be some of the most vibrant and sophisticated on the planet Coupled with the

rapid uptake of satellite and cable TV offers in urban environments reaching Asiarsquos

newly affluent consumers via traditional methods is proving increasingly costly and

difficult Companies are seeking new and more effective approaches to marketing

their brands and many see the potential of shopper marketing to deliver this

4 A changing retail landscape

Whilst in many markets the march of the lsquomodern tradersquo has slowed in the last few

years Asiarsquos retail environment continues to be a dynamic one A spate of

acquisitions has seen consolidation amongst big box retailers whilst the

convenience and proximity offered by convenience stores have prompted an

explosion in convenience stores and small supermarkets Concurrently it appears

that traditional independent retailers continue to thrive ndash Nielsen estimates there

are approximately 13 million lsquogeneral tradersquo outlets in Asia a number that remains

almost unchanged over the last decade Further in recent years China in particular

has seen an explosion in online shopping10 which has extended far beyond the

norms seen in developed economies This suggests that Asiarsquos shoppers may prove

to be rapid and early adopters of e-commerce for household goods in the near

future All this change makes understanding and anticipating future buying

behavior significantly more important to Asian manufacturers

9 Socialbakers ldquoTop 10 Biggest Facebook Citiesrdquo accessed October 1 2013 httpwwwsocialbakerscomblog647-top-10-biggest-

facebook-cities

10 McKinseyampCompany ldquoChinarsquos e-tail revolutionrdquo accessed November 26 2013 httpwwwmckinseycominsightsasia-

pacificchina_e-tailing

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

31

In the last five years wersquove observed that integrating the discipline of shopper

marketing into commercial operations has enabled companies to realize new

growth horizons and improve the overall efficiency of total marketing activities

Since it is unlikely that any of these trends will be short-lived we believe that the

impetus to adopt and integrate shopper marketing into the way consumer goods

companies do business in Asia will increase in the coming years

I n v e s t m e n t i n s h o p p e r m a r k e t i n g w i l l

i n c r e a s e a s w i l l t h e n e e d f o r r e t u r n s o n t h i s

i n v e s t m e n t

As organizations continue to embrace shopper marketing it is probable that levels

of investment will continue to increase Growth in expenditure will be driven by

competitive pressures as more and more businesses make investments in the

space and through internal pressure as well as shareholders demand high returns

on marketing investments

This increased expenditure is likely to have three of dimensions Clearly the first

dimension will be in the increase in shopper marketing activities themselves The

second dimension will be growth in research investment For activities to work

effectively shopper marketers must at the very least be able to identify the current

behavior of shoppers and understand how this may be influenced This requires the

creation of teams who can create actionable insights from research - and therefore

the third dimension in which investment will increase will be in people

Currently expenditure on activities appears to be dominating the agenda with

investment in people lagging far behind Until companies can leverage well-trained

managers working within well-configured business processes the returns that

companies enjoy from shopper research and shopper marketing activities are at

risk

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

32

We believe that effective shopper marketing strategies - those that truly change

purchase behavior and support greater brand consumption - are a major key to

tapping future profit opportunities We have seen through our work with clients

that when managed wisely investment in such strategies has delivered returns in

excess of 400 To deliver this level of return in the short-term greater focus

should be put on building business process and team capability

T a l e n t w i l l b e c o m e i n c r e a s i n g l y s c a r c e ndash

t h i s i s n o t a g o o d t h i n g

Across Asia finding developing and retaining talented individuals is a consistent

challenge This has been especially true in specialist sales and marketing functions

in the past Managers often complain that turnover rates in functions such as brand

management trade marketing and key account management exceed corporate

norms It is also noted that in these functions the escalation in salary costs

commonly exceeds inflation Clearly the market for specialist skills is tight and

therefore individuals who possess shopper marketing skills are likely to be highly

valuable in the future This of course presents a retention challenge for those

organizations which find themselves net ldquotalent donorsrdquo

It also creates a challenge for the recipient organizations These companies will

acquire expensive talent in the short-term but the evidence presented above

suggested that levels of competence are low at best and that most managers

working in the field have little or no understanding of the process of marketing to

shoppers

If left un-checked this cycle could create a vacuum in shopper marketing as

organizations rapidly seek to create and staff shopper marketing teams

Considering this potential outcome organizations may well benefit more from

integrating the process of shopper marketing into existing structures than from

creating stand-alone or specialist teams

Key conclusions

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

33

R e c o m m e n d a t i o n s

Integrate shopper marketing into the Total Marketing

process

The pace at which shopper marketing is being adopted in Asia suggests that many

companies embrace its potential to deliver topline and bottom line growth But the

challenge is ensuring that shopper marketing integrates effectively with other

commercial activities notably those in consumer marketing and sales Shoppers go

to stores (owned by retailers) to buy products which will be used or consumed by

consumers This connection consumer ndash shopper ndash retailer needs to be mirrored in

the internal workings of shopper marketing and the other functions This implies of

course that for shopper marketing to be truly effective it requires amendments to

ways of working across consumer marketing trade marketing and sales teams

We have observed that the companies that have embraced this challenge and taken

a holistic view of the marketing brands have fared better than others The most

successful approaches are those which treat shopper marketing as part of a ldquoTotal

Marketingrdquo approach One model which illustrates this is shown below

This model is based on the principle that successful consumer brands are driven by

continually increased consumption Quantifying a consumption opportunity helps

an organization identify the desired shopper behavior for consumption to increase

shopping behavior needs to change With a clear understanding of shopper

behavior companies can determine which channels should be prioritized

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

34

At this point a marketing mix can be designed to deliver both the desired

consumption behavior and the desired shopping behavior This enables investment

decisions to be optimized

Integrating shopper marketing into the companyrsquos current working practices in this

way allows companies to utilize existing teams and build on commonly utilized

practices It also creates seamless marketing campaigns and avoids the creation of

unnecessary silos

Prioritize process development

Itrsquos already been seen that the adoption of shopper marketing is likely to lead to

increases in expenditure on research headcount and on marketing activities

Whilst there is a general view that this will lead to positive returns the lack of

coherent business processes may retard or prevent these from being realized

Those organizations that do develop processes to support shopper marketing are

more likely to leverage spend on research and headcount faster and measure the

outcomes of activities more effectively

In general businesses appear to wait to create these processes which exposes

them to the potential of wasted time energy and resources This can be avoided by

developing business processes early and evaluating them over time ndash after all a

process is easily altered but lost funds can never be recouped

Develop existing teams to be the ldquoTotal Marketingrdquo of

the future

50 of respondents suggested that a lack of training hampers their development in

the shopper marketing space In an environment where there simply isnrsquot enough

talent to go around developing existing teams becomes a necessity

Key conclusions

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

35

Since the core skills required to market to shoppers are not markedly different to

those needed in consumer marketing (segmentation insight creation prioritization

activity planning briefing and so on) focusing on extending the competence of

those who already possess many of these skills is a sensible approach The goal of

developing marketers of the future is to change the organizationrsquos behaviors in such

a way that all marketing activities consider the outcomes in terms of consumers

shoppers and retailers

Whilst classroom training can have an impact on its own there are limits to the

degree of behavioral change it can create But depending on the size scale and

complexity of the business there are additional development tools which can be

used in conjunction or as a replacement to classroom training to create a more

holistic approach It has been observed that blends of coaching team-led coaching

assessments and self-learning tools to ensure that new skills stick and create real

change in behavior

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

About engage

engage is a management consultancy with specific expertise in shopper marketing

and customer management We are a network of passionate practitioners with a

pedigree in retail manufacturing and research and are recognized as leaders in our

field

Our mission is to change the way people think about shopper marketing and

demonstrate that it can transform performance levels by creating a truly integrated

approach to marketing strategies By adopting shopper marketing practices

managers in the consumer goods industry are better placed to engage with their

peers consumers shoppers trade customers and their suppliers

Shopper marketing is revolutionizing the world of consumer goods With our

experience our insights and our practical powerful and proven approaches we can

help you better understand how the world of shopper marketing impacts your

world and how business performance can be improved

Connect with engage

36

wwwengageconsultantscom

contactengageconsultantscom

wwwfacebookcomshopperexperts

wwwtwittercomengagetheexperts

wwwlinkedincomcompanyengage-ltd

wwwengageconsultantscomblog

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia

About Nielsen

Nielsen Holdings NV (NYSE NLSN) is a global information and measurement

company with leading market positions in marketing and consumer information

television and other media measurement online intelligence mobile

measurement trade shows and related properties Nielsen has a presence in

approximately 100 countries with headquarters in New York USA and Diemen the

Netherlands For more information visit wwwnielsencom

37

The Current State of Shopper Marketing in Asia